Agricultural Development in India Since Independence

Tripathi and Prasad: Agricultural Development in India since Independence
INDIA, CHINA AND AMERICA INSTITUTE

1549 CLAIRMONT ROAD, SUITE 202 DECATUR, GA 30033 USA
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Agricultural Development in India

since Independence: A Study on
Progress, Performance, and
Determinants
Amarnath Tripathi & A.R. Prasad
Journal of Emerging Knowledge on Emerging Markets
Volume 1 Issue 1
November 2009
Published by DigitalCommons@Kennesaw State University, 2009
Journal of Emerging Knowledge on Emerging Markets, Vol. 1 [2009], Art. 8
Agricultural Development in
India since Independence: A
Study on Progress,
Performance, and
Determinants
Amarnath Tripathi
Agriculture Economic Research Unit
Institute of Economic Growth
A.R. Prasad
Department of Economics
Banaras Hindu University
Journal of Emerging Knowledge on Emerging Markets
Volume 1 Issue 1
November 2009
Introduction
griculture plays an essential role in the process of economic development of less

developed countries like India. Besides providing food to nation, agriculture
releases labour, provides saving, contributes to market of industrial goods and
earns foreign exchange. Agricultural development is an integral part of overall economic
development. In India, agriculture was the main source of national income and occupation
at the time of Independence. Agriculture and allied activities contributed nearly 50 percent
to Indias national income. Around 72 percent of total working population was engaged in
2009 JOURNAL OF EMERGING KNOWLEDGE ON EMERGING MARKETS WWW .ICAINSTITUTE.ORG
http://digitalcommons.kennesaw.edu/jekem/vol1/iss1/8
DOI: 10.7885/1946-651X.1007
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63

AGRICULTURAL DEVELOPMENT IN INDIA SINCE INDEPENDENCE: A STUDY ON PROGRESS,
PERFORMANCE, AND DETERMINANTS
agriculture. These confirm that Indian economy was a backward and agricultural based
economy at the time of Independence. After 61 year of Independence, the share of
agriculture in total national income declined from 50 percent in 1950 to 18 percent in 200708. But even today more than 60 percent of workforce is engaged in agriculture. In spite of
this, it is also an important feature of agriculture that is to be noted that growth of other
sectors and overall economy depends on the performance of agriculture to a considerable
extent. Because of these reasons agriculture continues to be the dominant sector in Indian
Economy.
Since independence India has made much progress in agriculture. Indian agriculture, which
grew at the rate of about 1 percent per annum during the fifty years before Independence,
has grown at the rate of about 2.6 percent per annum in the post-Independence era.
Expansion of area was the main source of growth in the period of fifties and sixties after
that the contribution of increased land area under agricultural production has declined over
time and increase in productivity became the main source of growth in agricultural
production. Another important facet of progress in agriculture is its success in eradicating of
its dependence on imported foodgrains. Indian agriculture has progressed not only in output
and yield terms but the structural changes have also contributed. All these developments in
Indian agriculture are contributed by a series of steps initiated by Indian Government. Land
reforms, inauguration of Agricultural Price Commission with objective to ensure
remunerative prices to producers, new agricultural strategy1, investment in research and
extension services, provision of credit facilities, and improving rural infrastructure are some
of these steps.
Notwithstanding these progresses, the situation of agriculture turned adverse during postWTO period and this covered all the sub sectors of agriculture. The growth rates in output
of all crops decelerated from 2.93 percent to 1.57 percent. The livestock declined from 4.21
percent to 3.40 percent. The fisheries declined from 7.48 percent to 3.25 percent. Only,
forestry witnessed a sharp increase from 0.09 percent to 1.82 percent.
In order to achieve the goal of self sufficiency in agriculture, new agricultural

strategy has been initiated in 1966-67. The fundamental of this strategy is the
application of science and technology for increasing yield per hectare. This strategy,
known as New Agricultural Strategy or Green Revolution, is based on the extension of
high yielding varieties responsive to heavy doses of fertilizers and the package of
improved practices in selected areas with assured rainfall or irrigation facilities. The
programmes included under the new strategy are: (1) the high yielding varieties
programme, (2) multiple cropping programme, (3) integrated development of dry areas,
(4) plant protection measures, (5) increased use of fertilizers, and (6) new irrigation
concept.
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64

The crop sector, which forms largest segment of agriculture, showed poorest growth during
post-WTO period in comparison to all other periods. Further, within crop sector, all crops
except sugar showed declining trend between initial years of reforms and post-WTO period.
This deceleration is very high in Cereals, Corse Cereals, Pulses, Oilseeds, and Drugs &
Narcotics. The growth rate turned negative in the case of pulses.
Both dominant nature of agriculture and decelerating growth trend in agriculture attracts
attention of policymakers, researchers and economists. The main cause of failure of all
development policy for agriculture is that there is no availability of any separate
development strategy2 for Indian agriculture. This is due to the fact that we had not
available necessary data to study the characteristics of Indian agriculture. But presently we
have come a long way from Independence and now we have long-terms data pertaining to
Indian agriculture. So, the present study makes attempt to fill this gap.
In this context, the present paper extensively evaluates performance and progress of Indian
agriculture since Independence. Besides comparing facts and figures, we also examined
sources of agricultural growth and instability of Indian agriculture for evaluating
performance and progress of Indian agriculture. The paper also finds out determinates of
agricultural production by using production function approach and verifies the results of
decomposition of agricultural growth. This paper covered period from 1950-51 to 2005-06.
We have chosen 1950-51 as starting period because all required data is not available (some
data are available but sources are not authentic) for period before 1950-51 and 2006-07 as
end period because the most recent data pertained to 2006-07 at the time of finalising the
paper.
The rest of the paper is organized as follows. Section (ii) reviews previous agricultural
policies. Section (iii) evaluates changes and performance of Indian agriculture since
Independence. In this section, we discussed change in whole scenario of Indian agriculture
over period of time. Section (iv) guesstimate sources of agricultural growth by
decomposition analysis. Section (v) calculates instability in production, area, and yield of
principal crops. Section (vi) estimates determinants of agricultural production by production
function approach. Concluding remarks are presented in the final section.
Agricultural Policy: A Review

In this section, we try to trace out the principle government policies for promoting
agricultural development. For the overall development of Indian agriculture, many
institutional and infrastructural changes have been introduced since Independence. Broadly,
agricultural policy followed during this period can be distinguished in four phases: first
phase considered from 1947 to mid sixties, second phase considered period from mid2
Agriculture production is a biological process, agriculture is diminishing returns activity because land is
ultimately a fixed factor of production and the demand for agricultural commodities is income inelastic.
These characteristics make different to agriculture from other sector. Therefore, a separate policy for
agricultural development is must.
DOI: 10.7885/1946-651X.1007
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65

sixties to 1980, third phase included period from 1980 to 1991, and forth phase includes
period from 1991/92 onwards.
The first phase of agricultural policy witnessed tremendous agrarian reforms, institutional
changes, development of major irrigation project and strengthens of cooperative credit
institution. The most important contribution of land reforms was abolition of intermediaries
and giving land titles to the actual cultivators. This released productive forces and the
owner cultivators put in their best to augment production on their holdings. Land reforms
were important in increasing agricultural production during this phase. The Community
Development Programme, decentralised planning and the Intensive Area Development
Programmes were also initiated for regenerating Indian agriculture that had stagnated
during the British period. In order to encourage the farmers to adopt better technology,
incentive price policy was adopted in 1964 and the Agricultural Price Commission was set
up to advice the Government on the fixation of support prices of agricultural crops. Despite
the institutional changes and development programmes introduced by the Government
during this phase, India remained dependent upon foreign countries for food to feed the
rising population.
The second phase in Indian agriculture started in mid 1960s with adoption of new
agricultural strategy3. The new agricultural strategy relies on high-yielding varieties of
crops, multiple cropping, the package approach, modern farm practices and spread of
irrigation facilities. The biggest achievement of this strategy has been attainment of self
sufficiency in foodgrains. Agrarian reforms during this period took back seat while
research, extension, input supply, credit, marketing, price support and spread of technology
were the prime concern of policy makers (Rao, 1996).
The next phase in Indian agriculture began in early 1980s. This period started witnessing
process of diversification which resulted into fast growth in non-foodgrains output like
milk, fishery, poultry, vegetables, fruits etc which accelerated growth in agricultural GDP
during the 1980s (Chand, 2003). There has been a considerable increase in subsidies and
support to agriculture sector during this period while public sector spending in agriculture
for infrastructure development started showing decline in real term but investment by
farmers kept on moving on a rising trend (Mishra and Chand, 1995; Chand, 2001).
The fourth phase of agricultural policy started after initiation of economic reform process in
1991. Economic reforms process involved deregulation, reduced government participation
in economic activities, and liberalization. Although there is no any direct reforms for
agriculture but the sector was affected indirectly by devaluation of exchange rate,
liberalization of external trade and disprotection to industry. During this period opening up
of domestic market due to new international trade accord and WTO was another change that
affected agriculture. This raised new challenges among policymakers. Because of this, a
New Agricultural Policy was launched by Indian Government in July 2000. This aims to
3
This is also known as Green Revolution strategy.
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66

attain output growth rate of 4 percent per annum in agriculture sector based on efficient use
of resources. It seeks to achieve this objective in a sustainable manner and with equity. This
was first time when government released a national agriculture policy. The policy document
discusses what ought to be done in agriculture but the subsequent step, how and when
policy goals and objective would be achieved is not discussed (Chand, 2003). Therefore, it
is highly desirable to prepare action plans at both centre and state level in quantity terms to
implement the new policy agenda in a time bound framework.
Changing Agrarian Economy since Independence

In this section we focused on how agrarian economy has changed since Independence.
Keeping this view in mind this section follows land use pattern, population and agricultural
workers, distribution of operational holding, and cropping pattern.
Land Use Pattern

The basic factor in agriculture is land. A knowledge about land use pattern is vital to
understand whether the utilisation of land in India is at its full potential or far from its full
potential. In India the classification of land has had its roots in agricultural statistics. Till
1950, the land in India was broadly classified into five categories: (i) Area under forests; (ii)
Area not available for cultivation; (iii) Uncultivated lands including current fallows; (iv)
Area under current fallows; and (v) Net area sown. But then it was realised that such a
classification did not give a clear picture of the actual area under different categories of land
use required for agricultural planning. Hence, a reclassification was adopted from March
1950. Under it, land in India now classified under nine different categories. These are as: (i)
forests; (ii) barren and uncultivable lands; (iii) land put to non-agricultural uses; (iv)
cultivable wastes; (v) permanent pastures and other grazing lands; (vi) miscellaneous tree
crops and groves not included in the net area sown; (vii) current fallows; (viii) other
fallows; and (ix) net sown area.
Table 1 shows changes in land use pattern in India since 1950/51.The total geographical
area of the country is 328726 thousand hectares in which 93 percent area is reporting area
which means that the area for which record is available. It was 88 percent in 1950/51. The
net sown area has risen by 18.44 percent from 1950/51 to 2000/01. The net sown area is
only 46 percent of total reporting area that was 41 percent of total reporting area in 1950/51.
The area under non agricultural use has increased from 12690 thousand hectares to 24070
thousand hectares since 1950/51. But barren and uncultivable land has fallen from 37484
thousand hectares to 17709 thousand hectares. Both the cultivable waste land and fallow
land have also decreased during this period. But even today 4.4 percent of total reporting
area is available as a cultivable waste land and 4.8 percent of total reporting area is fallow
land. This indicates that there is scope to increase the net sown area by at least 5 to 10
percent by improving both cultivable waste land and fallow. Gross sown area was 131893
thousand hectares in 1950/51 and it has increased to 185704 thousand hectares in 2001/02.
DOI: 10.7885/1946-651X.1007
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This shows that only 11 percent of net sown area was used for more than one crop in
1950/51 and this figure increased to 31 percent in 2001/02. This point out that gross sown
area can be increased by 70 percent of net sown area through intensive cropping.
Table 1: Changes in Land Use Pattern in India from 1950-51 to 2001-02

Category
Geographical Area
Reporting Area for
land use
Area under non
agricultural use
Barren and
uncultivable land
Net sown area
Gross sown area
Cropping Intensity
Forest land under
good tree cover
Misc. tree crops
and groves
Cultivable
wastelands
Current fallows
Old fallows
Permanent
pastures and
grazing lands
1951-52
328726
287827
(87.56)
12690
(4.41)
37484
(13.02)
119400
(41.48)
131893
111
48889
(16.98)
7881
(2.73)
23929
(8.31)
13808
(4.80)
15154
(5.26)
8592
(2.98)
1961-62
328726
299151
(91)
14795
(4.95)
35921
(12.01)
135399
(45.26)
152772
115
54189
(18.11)
4500
(1.50)
18632
(6.23)
11155
(3.73)
10478
(3.50)
14082
(4.70)
1971-72
328726
304141
(92.52)
16972
(5.58)
27996
(9.20)
139721
(45.94)
165791
118
63771
(20.97)
4284
(1.41)
17456
(5.74)
12669
(4.16)
8312
(2.73)
12960
(4.26)
(In Thousand Hectares)

1981-82
1991-92 2001-02
328726
328726
328726
304272
304900
305014
(92.56)
(92.75)
(92.79)
19686
21465
24070
(6.47)
(7.04)
(7.89)
20010
19270
17709
(6.58)
(6.32)
(5.81)
141928
141632
141416
(46.64)
(46.45)
(46.36)
172630
185742
185704
123
130
131
67422
67866
69511
(22.15)
(22.25)
(22.79)
3715
3761
3370
(1.22)
(1.23)
(1.10)
16475
14994
13405
(5.41)
(4.92)
(4.39)
13173
14672
14643
(4.33)
(4.81)
(4.80)
9862
9941
10304
(3.24)
(3.26)
(3.38)
12007
11299
10586
(3.95)
(3.71)
(3.47)
Note: figure in parentheses indicate percentage to Reported Area

Source: Agricultural Statistics at a Glance (2008)
Changing Agricultural Structure

We look at changing structure of Indian agriculture in terms of employment and land
holding. The share of agriculture in employment declined from about 82 percent in 1950/51
to about 72 percent by 2001. During the same duration, the share of agriculture in total GDP
also declined from 54.66 percent in 1950/51 to 24 percent by 2001.Among agricultural
workforce about 45.6 percent are registered as agricultural labour and the rest, i.e., 54.4
percent as cultivators while 28.1 percent was registered as agriculture labour and the rest as
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cultivators in 1950/51. This indicates that agricultural workforce shifted from cultivators to
agricultural labours (see Table 2).
Table 2: Population and Agricultural Workers in India since 1950-5

(In Millions)
Average
Annual
Exponential
Growth Rate
(%)
Year
Total
Population
Rural
Cultivators
Population
Agricultural
Labourers
1951
361.1
1.25 298.6 (82.7) 69.9 (71.9)
27.3
(28.1)
1961
439.2
1.96 360.3 (82.0) 99.6 (76.0) 31.5
(24.0)
1971
548.2
2.22 439.0 (80.1) 78.2 (62.2) 47.5
(37.8)
1981
683.3
2.20 523.9 (76.7) 92.5 (62.5) 55.5
(37.5)
1991
846.4
2.14 628.9 (74.3) 110.7 (59.7) 74.6
(40.3)
2001
1028.7
1.95 742.6 (72.2) 127.3 (54.4) 106.8 (45.6)
Total
Share of
Agriculture
to GDP (%)
140.0
(100.0)
188.7
(100.0)
180.4
(100.0)
244.6
(100.0)
185.3
(100.0)
234.1
100.0)
54.66
49.14
43
37.5
30.32
24
Note: figure in parentheses indicate percentage to Reported Area

There were 48900 million operational holding in 1960/61 and covered area of 131400
million hectares. These operational holding increased to 115580 million in 2000/01and
covered area of 163357 million hectares. It shows that the number of operational holding
has increased by about 66680 million units but the area covered by then has not
significantly increased. It implies that size of operational holding has been reducing.
Table 3 shows that the number of marginal and small holdings and the area under such
holdings has increased while the number of semi-medium, medium, and large holdings and
the area under such holdings has reduced. It reveals that the inequalities in the distribution
of land among the cultivators has reducing trend but the number of uneconomic holdings
has an increasing trend, i.e., small and marginal holdings are increasing in both number and
percentage.
DOI: 10.7885/1946-651X.1007
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Table 3: The Percentage Distribution of Operational Holding by Size Class,

1960-61 to 2000-01
(i) Share in Number of Holding (In Percentage)
1960-61
1970-71
1980-81
1990-91
40.69
50.6
56.4
59.4
22.29
19.1
18.1
18.8
18.8
15.2
14.0
13.1
13.4
11.3
9.1
7.1
4.9
3.9
2.4
1.6
(ii) Share in Operated Area (In Percentage)
Marginal
6.6
9.0
12.0
15.1
Small
12.17
11.9
14.1
17.4
Semi-Medium
19.93
18.4
21.2
23.2
Medium
30.51
29.8
19.6
27.0
Large
30.74
30.9
23.0
17.3
(iii) Average Size (In Hectares)
Marginal
0.41
0.39
0.39
Small
1.44
1.44
1.43
Semi-Medium
2.81
2.78
2.76
Medium
6.08
6.02
5.9
Large
18.1
17.41
17.33
Note: 1. Marginal 0 to 1 hectare; Small 1 to 2 hectare; Semi-medium
hectare; Medium 4 to 10 hectare; and Large 10 and above hectare.
Source: Agricultural Census Division, Ministry of Agriculture, New Delhi.
Category of holdings
Marginal
Small
Semi-Medium
Medium
Large
2000-01
63.0
18.80
11.7
5.4
1.02
18.82
20.18
23.96
23.84
13.21
0.40
1.41
2.72
5.80
17.18
2 to 4
Changes in Cropping Pattern

Cropping pattern means the proportion of area under different crops at a particular period of
time. A change in cropping pattern means a change in the proportion under different crops.
Table 4 indicates that the area under non-food crops as a proportion of the total cropped
area is increasing but still there is dominance of food crops. At the beginning of the
economic planning in India, 76.7 percent land was put under food crops and about 23.3
percent on non-food crops. By 2001, area under food crops had come down to 65.83 percent
and under non-food crops has increased to 34.17 percent. This shift in the allocation of area
from food crops to non-food crops reflect a change from subsistence cropping to
commercial cropping. This shifting of land from food crops to non-food crops was mainly
influenced by the prevailing price in market and profitability per hectare.
Similarly, here it can also be concluded that, there is preponderance of cereals, about 54.43
percent of the area is devoted to the production of cereals, while only 11.4 percent is
devoted to pulses. Though, the area under both cereals and pulses is increasing but the rate
of increase in area under cereals is greater than that of pulses. It means whatever cropped
area increased as a result of irrigation facilities, chemical fertiliser, and high yielding
varieties of seeds, a greater part of it is devoted to foodgrains. Within cereals, area under
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70

coarse cereals is gradually declining since 1950/51. This is due to fact that coarse cereals
are inferior goods.
Table 4: Changes in Cropping Pattern in India since 1950-51

Crops
1950-51
1960-61
1970-71
Rice
23.5
22.3
22.6
Wheat
7.6
8.5
11
Corse Cereals
29.9
29.4
27.8
Total Cereals
61.1
60.2
61.4
Total Pulses
15.6
15.5
14
Total Foodgrains
76.7
75.7
75.4
Sugarcane
1.3
1.6
1.6
Condiments &
0.9
1
1.1
Spices
Fruits & Vegetable
1.7
1.9
2
Total Oilseeds
8.3
8.3
8.9
Total Fibres
5.1
5.7
5.5
Tobacco
0.3
0.3
0.2
1980-81
23.3
12.8
24.6
60.8
13.2
73.9
1.7
1.2
1.7
9.1
5.3
0.3
(In Percent)
1990-91
2000-01
23
24.03
12.9
13.84
19.6
16.55
55.5
54.43
13.5
11.4
68.9
65.83
2.1
2.49
1.3
1.5
3.6
13.5
4.7
0.2
4.39
13.56
5.22
0.16
Furthermore, Table 4 also shows that area under fruits and vegetables and oilseeds is
gradually increasing since 1950/51. This is because the consumption pattern is shifting from
cereals to non-cereals. This phenomenon can be seen in Tables 5 and 6.
Table 5: Trends in Food Consumption Pattern from 1972-73 to 2004-05, All

India (Rural)
Sector
Rural
% share of major food groups in total expenditure

Milk &
Edible Egg, Fish Vegeta Fruits & Sugar
milk
oil
& meat
bles
nuts
products
72-73
72.9 40.6
4.3
7.3
3.5
2.5
3.6
1.1
3.8
87-88
64.0 26.3
4.0
8.6
5.0
3.3
5.2
1.6
2.9
93-94
63.2 24.2
3.8
9.5
4.4
3.3
6.0
1.7
3.1
99-00
59.4 22.2
3.8
8.8
3.7
3.3
6.2
1.7
2.4
04-05
55.0 18.0
3.1
8.5
4.6
3.3
6.1
1.9
2.4
st
Source: 61 Round Report of NSS, Ministry of Statistics and Programme implementation, New
Delhi.
Year
All
food
Cereals
Pulses
DOI: 10.7885/1946-651X.1007
PAGE
Beverages
& etc
2.4
3.9
4.2
4.2
4.5
71
10

Table 6: Trends in Food Consumption Pattern from 1972-73 to 2004-05, All

India (Urban)
Sector
Urban
% share of major food groups in total expenditure

Pulses Milk &
Edible Egg, Fish Vegeta Fruits & Sugar
milk
oil
& meat
bles
nuts
products
72-73
64.5 23.3
3.4
9.3
4.9
3.3
4.4
2.0
3.6
87-88
56.4 15.0
3.4
9.5
5.3
3.6
5.3
2.5
2.4
93-94
54.7 14.0
3.0
9.8
4.4
3.4
5.5
2.7
2.4
99-00
48.1 12.4
2.8
8.7
3.1
3.1
5.1
2.4
1.6
04-05
42.5 10.1
2.1
7.9
3.5
2.7
4.5
2.2
1.5
st
Source: 61 Round Report of NSS, Ministry of Statistics and Programme implementation, New
Delhi.
Year
All
food
Cereals
Beverages
& etc
7.6
6.8
7.2
6.4
6.2
Following inferences can be drawn in these two tables.

1. The share of food in the total budget expenditure of a household has been showing a
decline over the years in both rural and urban sector. In rural all India, the share of
food declined from 72.9 percent in 1972-73 to 55 percent in 2004-05 and in urban
all India it declined from 64.5 percent in 1972-73 to 42.5 percent in 2004-05.
2. Although cereal continues to be the important constituent of a households food
bosket, its share in total budget is declining.
3. The share of pulses is also showing declining trend.
4. The consumption of vegetables and fruits, milk, meat, egg, and fish, and edible oil
has shown an increase.
The structural shift in consumption pattern is on account of the consumption diversification
effect because of easy access to supply, changed tastes and preferences, and change in
relative prices (Radhakrishna and Ravi 1992; Kumar 1998; Murthy 2000). Increasing
urbanization and economic growth reduces per capita demand for cereals and increases the
demand for non-cereals food items. Modernisation of agricultural also bears a similar
negative relationship with the per capita consumption of cereals. Mechanization of
agricultural activities and improvement in infrastructure also contribute to reduction in
energy requirement and thus less cereal consumption (Rao 2000).
Performance of Indian Agriculture

Output Growth
Agricultural growth is one of the main facets of Indias economic development and national
food sufficiency policies. Tables 7-8 show the growth rate of agriculture by sector and
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11

different crop wise. The aggregate agricultural output increased annually at 2.6 percent
during period from 1950/51-2006/07. Disaggregating of aggregate agricultural output
growth into sub periods shows that annual growth rate of agriculture was the highest during
the period 1981/82-1990/91 and the lowest during period 1950/51-1965/66. Further
disaggregating of agriculture into sub sectors; crop, livestock, forestry, and fishing, shows
that fisheries and livestock were the main sources of the acceleration in growth rate of
agricultural output in 1980s. The growth rate of aggregate agricultural output turned up
3.29 percent during the initial years of reforms, which was 0.43 percentage point higher
than the previous period. However, the situation of agriculture turned adverse during postWTO period and this covered all the sub sectors of agriculture. The growth rates in output
of all crops decelerated from 2.93 percent to 1.57 percent. The livestock declined from 4.21
percent to 3.40 percent. The fisheries declined from 7.48 percent to 3.25 percent. Only,
forestry witnessed a sharp increase from 0.09 percent to 1.82 percent.
Table 7: Average Annual Compound Growth in Value of Output

(Group Wise)
(In Percent)
1950/51 1966/67 1981/821991/921950/51 1965/66
1980/81
1990-91
2006/07
2006/07
Crop
2.4
2.6
2.4
2.2
2.5
Livestock
1.3
3.2
4.4
3.4
3.1
Forestry
1.3
00
00
1.5
0.6
Fishing
4.5
3.1
5.8
4.0
4.2
Aggregate
2.1
2.5
2.8
2.6
2.6
Note: Annual compound growth rates have been calculated by using log linear model
Group
Table 8: Average Annual Compound Growth in Value of Output

(Crop Wise)
Crop
1950/51 1965/66
3.6
3.4
1.6
1.1
2.5
4.4
3.1
2.1
2.5
1966/67 1980/81
2.6
6.4
0.9
0.5
1.4
2.5
2.1
3.2
3.2
1981/821990-91
4.0
3.2
0.7
1.6
5.4
2.6
2.6
2.2
4.5
1991/922006/07
0.9
1.4
0.5
0.4
0.7
4.1
1.6
2.6
4.9
(In Percent)
1950/51 2006/07
2.5
4.7
0.9
0.6
2.6
2.9
2.2
2.7
3.3
Rice
Wheat
Coarse Cereals
Pulses
Oil seeds
Sugar
Fibres
Drugs & Narcotise
Condiments &
Spices
Fruits & Vegetables
1.8
4.3
2.1
4.3
3.8
Others
00
0.4
00
4.6
0.6
Note: Annual compound growth rates have been calculated by using log linear model
DOI: 10.7885/1946-651X.1007
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The crop sector, which forms the largest segment of agriculture, grew annually at 2.5
percent since 1950/51. The acceleration rate of crop sectors fluctuated around 2.5 percent
during all sub periods. It grew at the lowest rate during post-WTO period in comparison to
all other periods. Further, within crop sector, all crops except sugar, condiment, spices,
fruits and vegetables showed declining trend between 1950/51-1965/66 and 1991/922006/07. This deceleration is very high in Cereals, Corse Cereals, Pulses, Oilseeds, and
Drugs & Narcotics. Similar declining trend in growth rate of all crops is also confirmed by
Table 9 that shows average annual compound growth rate of output in physical term for all
major crops.
Table 9: Average Annual Compound Growth in real term

(Crop Wise)
(In Percent)
1950/51 1950/51 1966/67 1981/821991/921950/51 2006/07
1965/66
1980/81
1990-91
2006/07
2006/07
Rice
2.5
3.6
2.6
4.1
1.0
2.5
Wheat
4.7
3.7
6.3
3.3
1.4
4.7
Coarse Cereals 0.9
2.2
0.9
0.7
0.7
0.9
Pulses
0.5
1.6
0.2
1.4
0.2
0.5
Oil seeds
2.9
2.8
2.1
5.6
0.9
2.9
Cotton
2.4
3.6
2.5
3.2
2.7
2.4
Jute & Mesta
1.5
4.4
2.1
0.7
1.5
1.5
Sugarcane
3.1
6.2
3.0
2.9
0.8
3.1
Tobacco
1.5
2.4
2.1
0.0
-0.1
1.5
Potato
5.4
5.4
7.2
4.9
3.1
5.4
Note: Annual compound growth rates have calculated by using log linear model
Crop
These growth rates are lower than the growth rate of rural population. Thus, the clear
implication of this growth trends is that the per capita output in agriculture is declining.
This seems to be one of the causes for rising disparity between rural and urban areas in
India.
Net Availability of Foodgrains

Table 10 shows net availability of foodgrains for per capita per day. An average availability
of foodgrains per capita per day was 429.8 gram in 1950s and increased to 475.5 gram
during 1990s. Further, it decreased to 446.6 gram in the first decade of 21st century. Within
foodgrains, all food crops reveals similar trend except coarse cereals. The availability of
coarse cereals is continuously declining.
PAGE
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13

Table 10: Net availability of foodgrains (per day) India

Decades
1951-60
1961-70
1971-80
1981-90
1991-2000
2001-2005
Rice
Wheat
Other
Cereals
178.1
188.3
183.0
198.1
209.3
194.7
65.9
91.1
114.8
143.3
162.7
159.9
119.4
113.5
100.9
83.2
67.7
59.0
(In Grams Per Capita per day)

Cereals
Gram Pulses
Foodgrains
363.4
392.9
398.7
424.6
439.7
414.2
27.5
22.6
17.0
13.2
12.3
9.8
66.4
54.7
43.5
39.6
35.8
32.4
429.8
447.5
442.2
464.2
475.5
446.6
Input Use Pattern

Agricultural production and efficiency largely depend upon the inputs applied and the
methods adopted. In India, while population grows, the land surface is fixed and of this
only a certain proportion is available for cultivation (Planning commission, 1961). Further
scope for bringing extra land under the plough is limited. If more production is to be got out
of this existing area, the problem has to be tackled on a wide front. This can be done by
applying inputs in a more intensive way and by adopting modern methods of production
through use of improved technology, besides making an adequate provision for institutional
financing, better methods of marketing, etc.
Technical factors, i.e., technology have received increasing emphasis and the recent
breakthrough in agriculture is the outcome of these factors. These technological factors
comprise (i) irrigation; (ii) Consumption of fertilisers and manure; (iii) Improved seed, and
(iv) agricultural implements.
Water is another basic factor in agriculture next only to land. Only rainfall is the natural
source of water in agriculture. But rainfall is the most unreliable and is marked by wide
variations in different parts and also variation from year to year in its quantity, incidence,
and duration. Therefore, only artificial supply of water through irrigation is the way to
overcome the problem of deficiency of water. Irrigation water comes from two sources:
surface water and ground water. Surface water is provided by the flowing water of rivers or
the still water of tanks, ponds, lakes, and artificial reservoirs. The surface water is carried to
the filed by canals, distributaries, and channels. Ground water is tapped by sinking wells
where drought animals, diesel or electric power is utilized to take out water. In india canals,
tanks, wells including tubewells are the principal sources of irrigation. Since 1950-51,
considerable importance had been attached to the provision of canal irrigation and well
irrigation. Even though 40 percent of irrigation is supplied by canals, now well irrigation
has caught up rapidly irrigation by tubwells has been expanded considerably. In the
meantime, tanks and other source of irrigation are declining in importance (see Table 11).
DOI: 10.7885/1946-651X.1007
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Table 11: Sources of Irrigation

Sources
Canals
Wells
including
tubewells
Tanks
Others
Total
1950/51
Area (Million
ha)
8.29
5.98
3.61
0.97
18.85
44.0
31.7
1970-71
Area (Million
ha)
12.80
12.10
19.1
5.2
100
4.10
2.60
31.60
40.5
38.3
2000/01
Area (Million
ha)
17.1
30.9
31.3
56.6
13.0
8.2
100
3.1
3.5
54.6
5.7
6.4
100
st
Source: Indian Agriculture in brief, 21 Edn, 1986 CMIE, Statistical Abstract, India, 2004
Table 12 shows that the net irrigated area has risen by 163 percent from 1950/51 to
2000/01. This increment in irrigated area is very nominal and only 39 percent of net sown
area is irrigated area. This figure is very unsatisfactory and it is matter of concern that why
only 39 percent of net sown area is irrigated area. It is also concerning matter that growth in
gross irrigated area is also very nominal. Thus, there is scope to increase agricultural
production by increasing both net and gross irrigated area.
Table 12: Changes in Irrigated Area in India from 1950-51 to 2000-01

Category
1950-51
1960-61
Net irrigated area
20853
24661
Gross irrigated area
22563
27980
Irrigation intensity
108
113
(In percent)
Note: Irrigation intensity is calculated by author.
Source: Agricultural Statistics at a Glance (2008
1970-71
31103
38195
123
(In Thousand Hectares)

1980-81
1990-91
2000-01
38720
48023
54836
49775
63204
75821
128
132
138
In any scheme for boosting agricultural output, the use of chemical fertiliser has an
important role. Indias soil though varied and rich in deficient in nitrogen and phosphorustwo plants nutrients which together with organic manure influence crop return, which
population rising at a first rate, the use of larger and larger doses of chemical fertiliser is the
only way to augment our foodgrains production. The new agricultural strategy was based on
increased use of fertiliser.
Since adoption of the new agricultural strategy in the sixties, the consumption of chemical
fertiliser has been growing rapidly. The Government is also encouraging the use of fertiliser
through heavy subsidies. That is why the consumption has gone up abnormally high from
70000 tonnes in 1950-51 to 2,177,000 tonnes in 1970-71, 12,546,000 tonnes in 1990-91 and
PAGE
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15

19,145,000 tonnes in 1999-2000 (see Table 13). The fertiliser consumption per hectare of
gross cropped area has also gone up steadily, from 0.50 kg in 1950-51 to 74 kg in 1995-96.
The corresponding figures for developed countries are much higher than the Indian
Agriculture (see Table 14).
The low consumption may be due to the poor economic condition of farmers, lack of
assured irrigation (58.5 % of the cropped area lack irrigation facilities), inadequate
demonstration and promotion for the use of fertilisers, insufficient supply at the proper
time, high price of fertiliser, absence of soil testing facilities so as to recommended the
precise deficiencies in the soil and recommended proper dose of fertiliser, and wrong notion
among some conservative farmers regarding the use of chemical fertilisers.
Improved seeds have played vital role in augmenting agricultural production in developing
countries like India. These seeds not only help in increasing in agricultural production by 10
to 20 percent but introducing new characteristics in the biological structure of the plant. For,
example researches have made it possible to develop such seeds which are quick maturing,
provide higher agricultural yield and are resistant to insects, diseases and droughts. In India
the success of Green Revolution is partly associated with the use of high yield variety
(HYV) seeds. The HYV programme was started in 1966. Between 1967-68 and 1996-97
the area under HYVP has witnessed 12.6 times increase (from 6.07 million ha to 76 million
ha). The success of the programme remains most marked in the case of wheat and rice. The
HYV programme has led to 4.84 times increase in the output of wheat from 1966-67 (11.39
million tonnes) to 1990-91 (51.1 million tonnes) and 1.78 times increase in the production
of rice from 1967-68 (37.6 million tonnes) to 1990-91 (74.3 million tonnes).
The implements and tools used by the Indian farmers are primitive, crude, and obsolete
which impede the development of modern agriculture. New farm machineries not only save
time, reduce cost of production but also increase agricultural production. These machineries
replace the animal and human power and perform various works of agriculture ranging
from ploughing, showing, and harvesting to the marketing of the produce. There is
difference of opinion amongst scholar regarding the mechanisation of agriculture. In fact
small and scatter land holding, cheap and abundant human labour and poverty amongst
farmers go against total mechanisation of Indian agriculture but the possibility of limited
mechanisation is not ruled out. In many cases where the use of animal and human power
has become costlier, mechanization is proving to be boon for agriculture. Even small
farmers prefer to use these machineries to save the time and money.
DOI: 10.7885/1946-651X.1007
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Table 13: Production, Import, and Consumption of Fertiliser

(In thousand tonnes)
1950/51 1960/61 1970/71 1980/81 1990/91 2000/01

A. Nitrogen
Production
Imports
Consumption
B. Phosphatic
Production
Imports
Consumption
C. Postassic
Production
Imports
Consumption
D. All fertilisers
Production
Imports
Consumption
09
98
399
210
830
477
1487
2164
1510
3678
6993
414
7997
10961
154
10920
09
52
53
229
32
462
841
452
1214
2052
1016
3221
3743
396
4215
20
29
120
228
797
624
1328
1328
1541
1567
150
419
292
1059
629
2177
3005
2759
5516
9045
2758
12546
14704
2090
16702
39
52
70
Source: Indian Economic Survey, 2002-03
Table 14: Fertiliser Consumption per Hectare of Agricultural Land in

Selected Countries in 2004-05
(In KG per Hectare)
Countries
Egypt
Bangladesh
India
Japan
Korea Rep.
Pakistan
Sri Lanka
Belarus
Denmark
France
Germany
Netherlands
Norway
Poland
United Kingdom
N
476.2
128.6
65.0
116.0
208.3
92.6
69.3
47.7
80.3
80.1
104.5
142.4
101.4
53.4
66.8
P
67.6
37.4
25.7
137.4
82.9
26.6
14.8
12.1
13.0
26.0
21.1
29.6
12.4
24.8
16.0
K
11.3
18.5
11.4
109.5
103.5
NA
25.8
55.6
36.7
33.1
28.1
77.4
44.7
37.9
22.3
Total
555.1
184.5
102.1
362.9
394.7
119.2
109.9
115.4
130.0
139.2
153.7
249.4
158.5
116.1
105.1
PAGE
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17

Studies show that sufficient progress has been made in respect of farm mechanisation in
India. For example, the number of tractors which was less than 10000 in 1950-51 increased
to 1 lakh in 1970-71 and 14.5 lakhs in 1990-91. Similarly, the number of diesel pump sets
increased from 80,000 in 1950-51 to 48.5 lakhs in 1990-91 and electric irrigation pump sets
from 26,000 in 1950-51 to 91 lakhs in 1990-91. But most of the mechanisation has largely
been confirmed to the rich farmers belonging to the developed areas of the country.
Sources of Growth in Indian Agriculture

Any change in the output of a crop in physical term4 depends fundamentally on the changes
in the area under the crop and its average yield. To measure the effect of area, productivity
and their interaction in increasing the crop output, differential equation given by Sharma
(1977) was used:
P = A Y + Y A + A Y
(1)
The first term on the right hand side is considered as yield effect, second term as the area
effect and the third as the interaction effect. Thus, total change in output can be
decomposed into three effects; yield effect, area effect, and the interaction effect due to
change in yield and area.
During 1950/51-1965/66, area and yield both almost equally contributed in growth of rice,
wheat, and coarse cereals. But for non-food crops, expansion area was dominant source of
output growth (see Table 15).
During 1965/66-1980/81, increase in yield was comparatively more contributed in output
growth of all major crops except Wheat and Jute and Mesta. For Wheat, 40.49 percent of
output growth was contributed by expansion in area and 34.46 percent was contributed by
increase in yield. Remaining part (25 percent) of output growth of Wheat was contributed
by interaction of area and yield (see Table 16).
During 1981/82-1990/91, an increase in yield was more contributed in output growth of all
major crops except oilseeds and sugarcane (see Table 17).
4 Agricultural output may be measured either in nominal or physical terms. The output measured in
physical term obviates the need for incorporation of price effect in decomposition of the changes in
output.
DOI: 10.7885/1946-651X.1007
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Table 15: Sources of Agricultural Growth in Period: (1950/511965/66)

Crop
Rice
Wheat
Coarse
Cereals
Pulses
Oil seeds
Cotton
Jute & Mesta
Sugarcane
Tobaco
Potato
Change in
Output
10010
3940
6040
Area Effect
Yield Effect
3112.7 (31.1)
1868.43 (47.42)
2723.24 (45.1)
5991.1 (59.85)
1606.83 (40.78)
2817.82 (46.65)
Interaction
Effect
906.16 (9.05)
464.74 (11.79)
498.93 (8.26)
1530
1240
307.7
444.6
66940
30
2420
1600.83 (104.63)
2174.12 (175.33)
183.04(59.49)
563.22(126.68)
37767(56.42)
14.62(48.73)
1660.1(68.60)
-57.27 (-3.74)
-665.26 (-53.65)
94.08(30.57)
-60.99(-13.72)
17604(26.30)
16.92(56.4)
383.04(15.83)
-10.89 (-0.7)
-280.24(-22.6)
33.28(10.82)
-57.78(-13)
11633(17.38)
0.94(3.13)
383.04(15.83)
Table 16: Sources of Agricultural Growth in Period: (1966/67 1980/81)

Crop
Rice
Wheat
Coarse
Cereals
Pulses
Oil seeds
Cotton
Jute & Mesta
Sugarcane
Tobaco
Potato
Change in
Output
11890
20440
4970
Area Effect
Yield Effect
3598.7 (30.3)
8276.38 (40.49)
-1765.48 (-35.52)
7431.4 (62.5)
7044.7 (34.46)
7269.1(146.26)
Interaction
Effect
879.12 (7.4)
5118.93(25.04)
-533.61(10.74)
2280
2940
295.8
284.4
61420
130
6150
128.18 (5.62)
1112.8 (37.85)
-2.28(-0.77)
190.44(66.96)
14924(24.3)
25.02(19.25)
1934.4(31.45)
2123.52(93.14)
1560 (53.06)
297.92(100.72)
80.64(28.35)
40268(65.56)
97.02(74.63)
2734.5(44.46)
32.64 (1.43)
270.4 (9.2)
-0.76(-0.26)
12.96(4.56)
6478(10.55)
6.93(5.33)
1512.7(24.60)

Crop
Rice
Wheat
Coarse
Cereals
Pulses
Oil seeds
Cotton
Jute & Mesta
Sugarcane
Tobaco
Potato
PAGE
80
Change in
Output
20660
17690
1610
Area Effect
Yield Effect
3392.8 (16.4)
3432.73 (19.40)
-4493.29 (-279.1)
16240 (78.6)
13070.14 (73.9)
7103.175(441.12)
Interaction
Effect
1027.4 (5)
1198.4 (6.8)
-1025.74(63.7)
2750
6530
333.2
154.8
54690
40
5300
396.06 (14.40)
3348.36 (51.28)
-102.9(-30.89)
-170.4(-110.1)
29180(53.35)
-35.16(-87.9)
2339.28(44.14)
2264.8 (82.36)
2496.12 (38.22)
475.54(142.72)
371.45(239.95)
22445(41.04)
79.64(199.1)
2476.1(46.72)
77.9 (2.83)
691.68 (10.59)
-36.58(-10.98)
-41.99(-27.13)
3518(6.43)
-5.43(-13.58)
586.44(11.06)
19

During 1991/92-2005/06, again yields contribution in output growth of all major crops
except Wheat, Sugarcane, and Potato was greater than expansion in area. It is a matter of
great concern as to why the productivity of wheat and sugarcane remains stagnant (see
Table 18).

Crop
Rice
Wheat
Coarse
Cereals
Pulses
Oil seeds
Cotton
Jute & Mesta
Sugarcane
Tobaco
Potato
Change in
Output
16370
18010
6930
2090
4660
1926.1
189
68940
-30
7520
Area Effect
Yield Effect
Interaction Effect
1838.5 (11.23)
11755 (65.27)
-3872.84
(55.88)
650.26 (31.11)
71.9 (1.54)
317.52(16.48)
-265.9(-140.7)
65408(94.88)
-2.34(7.8)
5884.48(78.25)
14203 (86.8)
5181.42(28.77)
12710.36(183.41)
349.65 (2.01)
1093.76 (6.07)
-1894 (-27.33)
1374.94 (65.79)
4556.64 (97.78)
1348.2(70)
546.12(288.95)
2933.8(4.25)
48.256(-160.9)
1188.8(15.81)
74.42 (3.56)
17.6 (0.38)
258.72(13.43)
-78.72(-41.65)
756.36(1.1)
-6.73 (22.44)
427.04(5.68)
Instability in Indian Agriculture

Instability is one of the important decision parameters in development dynamics and more
so in the context of agricultural production. An analysis of fluctuations in crop output, apart
from growth, is of importance for understanding the nature of food security and income
stability. Wide fluctuations in crop output not only affect prices and bring about sharp
fluctuation in them but also results in wide variations in disposable income of the farmers.
The magnitude of fluctuations depends on the nature of crop production technology, its
sensitivity to weather, economic environment, availability of material inputs and many
other factors. High growth in production accompanied by low level of instability for any
crop is desired for sustainable development of agriculture.
In this section we examined extent of production, area, and yield instability for major crops.
The instability in area, production and yield of major crops is measured in relative terms by
the Cuddy-Della Valle index which is used in recent years by a number of researchers as a
measure of variability in time series data. The simple coefficient of variation overestimates
the level of instability in time-series data characterized by long term trends whereas the
Cuddy-Della Valle index corrects the coefficient of variation.
DOI: 10.7885/1946-651X.1007
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The instability index IX, is given by the expression:
(2)
Where,
CV = Coefficient of variation (in percent)
= Coefficient of determination from a time-trend regression adjusted by the number of
degrees of freedom
The CV is calculated by using this formula:
mean6.
where,
standard deviation5 and
It may be mentioned here that some researchers have estimated the CV around trend as the
standard error of regression divided by mean. After estimating in both ways from the same
set of data, Sindh and Byerlee (1990) found that the results are almost identical whichever
method is used. Since both methods provide the same results, we decided to estimate the
instability index using the Cuddy-Della Valle index. Thus, instability index are calculated
for the pre-green revolution, post-green revolution period, and post-reform period. These
results are shown in Tables 20, 21, and 22. For wheat, rice, pulses, oilseeds, cotton, jute,
and potato, these measures show decrease in production instability during post-reform
period. This indicates that post-reform period helps in reducing production instability for
these crops. Yet, despite this decrease in production instability, corse cereals, sugarcane,
and tobacco realized an increment in production instability during post-reform period. Area
instability for wheat, jute, sugarcane, and potato decreased by 49.43 percent, 41.36 percent,
5.5 percent, 13 percent, respectively and for rice, corse cereals, pulses, oilseeds, cotton, and
tobacco increased by 22 percent, 33 percent, 11 percent, 35 percent, 65 percent, and 60
percent, respectively in post-reform period. Further, the results indicates that the yield
instability for rice, wheat, corse cereals, pulses, jute and sugarcane declined by 36 percent,
37 percent, 6 percent, 32 percent, 64 percent, and 0.4 percent, respectively during postreform period. But Yield instability for oilseeds, cotton, potato, and tobacco increased by 3
percent, 93 percent, 11 percent, 19 percent, respectively. Production instability was the
highest for tobacco (15.03), oilseeds (14.93), jute (14.65), cotton (10.86), and coarse cereals
(10.42). Yield instability was the largest for cotton (20.54), and oilseeds (10.38).
The Standard deviation is equal to
The arithmetic mean is equal to
PAGE
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21

Table 20: Instability in Production

Crop
Wheat
Rice
Corse
Cereals
Pulses
Oil Seeds
Cotton
Jute
Sugar cane
Potato
Tobacco
Pre-green revolution
CV
Instability
Index
19.315
9.71
18.881
8.95
Post-green revolution
CV
Instability Index
36.429
23.310
10.46
9.03
8.845
8.017
6.21
6.77
13.267
13.428
16.003
20.008
25.922
32.166
30.655
14.935
10.562
12.777
30.317
21.063
23.160
23.873
44.046
16.504
9.17
10.94
14.89
11.83
19.86
9.51
9.97
11.43
10.544
8.835
14.918
20.730
26.836
9.600
16.205
15.107
10.42
9.15
14.93
10.86
14.65
9.64
9.64
15.03
9.20
11.59
8.83
11.86
16.58
12.74
13.56
9.90
Post-reform
CV
Instability Index
Table 21: Instability in Area

Crop
Wheat
Rice
Corse
Cereals
Pulses
Oil Seeds
Cotton
Jute
Sugar cane
Potato
Tobacco
CV
Instability
Index
12.299
6.86
6.692
1.69
CV
Instability Index
15.455
5.053
7.00
2.38
4.338
2.836
3.54
2.91
4.954
8.459
12.232
9.666
22.878
18.313
22.312
9.609
7.480
4.326
13.277
5.165
13.426
13.565
23.526
9.277
2.78
3.90
5.53
4.92
13.71
7.46
5.70
8.90
6.382
4.235
7.424
8.315
7.764
7.781
10.268
15.006
3.70
4.33
7.52
8.14
8.04
7.05
4.95
14.29
3.91
5.40
3.29
6.40
13.78
9.62
3.26
7.47
Post-reform
CV
Instability Index
DOI: 10.7885/1946-651X.1007
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Table 22: Instability in Yield

Crop
Wheat
Rice
Corse
Cereals
Pulses
Oil Seeds
Cotton
Jute
Sugar cane
Potato
Tobacco
CV
Instability
Index
10.144
7.71
13.220
8.38
CV
Instability Index
24.136
18.587
6.17
7.49
5.450
6.243
3.92
4.74
8.707
7.896
8.394
13.166
5.934
15.363
10.849
7.904
15.135
10.349
16.585
22.018
15.824
12.367
23.076
16.135
8.13
9.29
10.10
10.64
8.10
5.02
7.12
5.22
11.060
6.222
11.538
20.579
8.360
4.997
8.932
6.205
7.64
6.33
10.38
20.54
2.94
5.00
7.89
6.20
6.43
8.15
8.48
9.37
6.04
7.02
10.56
5.90
Post-reform
CV
Instability Index
Overall analysis indicates that production and yield instability for almost crops declined in
post-reform period. But further it also indicates that area instability increased in the same
period. Therefore, it can be concludes that reduction in production instability is mainly due
to reduction in instability of yield and present instability in production is mainly because of
increasing instability in area.
Determinates of Agricultural Production

This section aims at analyzing the impact of production variables (inputs) on agricultural
output growth. For this purpose we used Cobb-Douglus Production Function specified as:
loge (GVAO) = 0 + 1loge (L) + 2 loge (M) + 3 loge (K) + t
(3)
where GVAO is gross value of agricultural output; L is agricultural land force; K is capital
input; M is agricultural labour; Coefficients i ( i =1, 2, 3) are the elasticities of the
respective variables with respect to agricultural production, with the assumption that i >0.
The data used in the estimation of production function were country level agricultural
output and inputs for estimating the Cobb-Douglas production function of Indian
agriculture from 1950/51 to 2005/06. Most previous studies on Indian agriculture used
gross value of agricultural output (GVAO) as the total value of agricultural production.
GVAO is defined as the sum of the total value of production from farming, forestry,
livestock, and fishery. The sum of output of all products of farming, livestock, forestry, and
fishery equals to GVAO and is expressed at constant (1999/2000) prices. The data on
PAGE
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23

GVAO were taken from the National Account Statistics (Back series 1950 to 2000, and
2008) published from Central Statistical Organization, Government of India.
Labour, land, and capital are considered the three main inputs in agricultural production.
Labour input is measured as workforce involved in agriculture. The data of workforce in
agriculture is given in Agricultural Statistics at a Glance (2008) published from Directorate
of Economics and Statistics, Ministry of Agriculture, Government of India only for census
year. This series was interpolated for making time series data. Land input refers to the net
cultivated area and is measured by net sown area. The data were taken from Agricultural
Statistics at a Glance (2008). Capital stock of a country is broadly referred to as that part of
national wealth which is reproducible; it consists of all resources which contribute to the
production of goods and services. Capital is measured in terms of net fixed capital stock in
agriculture and data related to net fixed capital stock are taken from Nation Account
Statistics. This capital stock measure includes agricultural machinery, farm equipment and
tools, transport equipment in farm business, land improvements, investments in private and
public irrigation, and farm houses.
Results for the Cobb-Douglas estimates are reported in Tables 23.1, 23.2, & 23.3. The
estimated agricultural production function for Indian agriculture based on data during
1950/51 to 2005/06 can be expressed in the following mathematical form:
Loge (GVOA) = -0.44 + 0.32 Loge (L) + 0.88 Loge (M) + 0.36 Loge (K)
(3.12)
(0.32)
(0.17)
(0.15)
From the above equation, we can see that in Indian agriculture during 1950/51 to 2005/06,
the output elasticities of land, labour, and capital were 0.32, 0.88, and 0.36 respectively. If
= 0.32, and the land input increases to about 1 percent, then the gross value of agricultural
output increases 0.32 percent. Similarly, = 0.88, and = 0.36 can be interpreted in the
same way. The sum (, , and ) gives information about the returns to scale, that is,
response of output to a proportionate change in the input, in our case adding the three
output elasticities we obtain 1.56 , which gives the value of the returns to scale parameter.
As we can see the sum is greater than 1, thus there are increasing returns to scale. As is
evident, over the period of the study, the Indian agriculture is characterized by increasing
returns to scale doubling the inputs will more than double the output.
DOI: 10.7885/1946-651X.1007
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Table 23.1: Model (without dummy variables) Summary

Model
Adjusted R
0.986
Std. error of the

estimate
0.05048
Table 23.2: Analysis of Variance (ANOVA)

Model
1 Regression
Residual
Total
Sum of
Squares
10.384
0.130
10.514
Df
Mean Square
Sig.
3
51
54
3.461
0.002
1358.32
0.000
Table 23.3: Coefficients

Variables
Coeff.
Std. Err.
Cons.
-0.44
3.123
Nsa
0.32
0.318
Labr
0.88*
0.059
Cptl
0. 36*
0.063
* Significant at 1 percent level
t- Value
-0.14
1.02
14.81
5.75
Adj- R
.986
DW- Stat.
1.120
From a purely statistical viewpoint, the estimated regression line fits the data quite well.
The R2 value of 0.99 means that 99 percent of the variation in the (logarithmic of) gross
value of agricultural output is explained by the (logarithmic of) land, labour, and capital.
For adjusted R2 the relation is 99 percent. This shows the statistical dependence of the
(logarithmic of) gross value of agricultural output on the (logarithmic of) labour, land and
capital, and and are statistically significant at the 1 percent level and is not significant.
The dw-statistic is equal to 1.121. From the Durbin-Watson tables, we found that for 55
observation and three explanatory variables, dL = 1.414 and dU = 1.724 at the 5 percent
level. Since the computed dw-statistics lies below dL, cannot reject the hypothesis that there
is positive autocorrelation.
Despite the problem of autocorrelation, intercept and output elastities estimated by equation
2 are constant over period of time. But in real it is not true, i.e., intercept and output
elasitcties are variable over period of time. This is because of structural changes that
occurred in economy during a period of time. The structural changes also occurred in Indian
Agriculture. Pulapre, Balakrishnan, and Parameswaran (2007) identified agricultural growth
shows trend break in 1964/65 when growth accelerates. It means that there are two growth
regimes in Indian Agriculture since 1950. One is from 1950/51 to 1964/65 and second is
beyond 1964/65. Expansion of area was the main source of growth in the first regime of
agricultural growth after that the contribution of increased land area under agricultural
production has declined over time and increase in productivity became the main source of
PAGE
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growth in agricultural production in second regime of agricultural growth. This estimation

have confirmed that intercept and output elasticites are not constant over the period of time.
To solve this problem, we have used dummy variables, i.e., 0 for observations in 1950/511964/65 and 1 for observations in 1965/66-2005/06, in equation 2.
First, we hypothesized that only level of agricultural output (intercept) has changed between
these two regimes of agricultural growth. So, to capture this difference, we have
incorporated intercept dummy in equation 3:
loge (GVAO) = 0 + 1loge (L) + 2 loge (M) + 3 loge (K) +4Dt + t
(4)
Next we hypothesized that both level of agricultural output (intercept) and output
elasticities have changed between these two regimes of agricultural growth. To capture
these differences, we have incorporated both intercept dummy and slop dummy in equation
3. The equation 3 becomes:
loge (GVAO) = 0 + 1loge (L) + 2 loge (M) + 3 loge (K) +4Dt + 5 [Dt loge (L)]
+ 6 [Dt loge (M)] + 7 [Dt loge (K)] + t
... (5)
Results for the Cobb-Douglas Production function with only intercept dummy (equation 4)
estimates are reported in Tables 24.1, 24.2, & 24.3. The estimated agricultural production
function with only intercept dummy for Indian agriculture based on data from 1950/51
through 2005/06 can be expressed in the following mathematical form:
loge (GVAO) = -0.48 + 0.38 loge (L) + 0.98 loge (M) + 0.27 loge (K) + 0.06 Dt
(3.079)
(0.316)
(0.085)
(0.086)
(0.04)
From the above equation, we can see that in Indian agriculture during the period 1950-51 to
2005-06, the output elasticities of land, labour, and capital were 0.38, 0.98, and 0.27,
respectively. The coefficient of intercept dummy is 0.06. This indicates that intercept
increased by 0.06 from period first to second. It means that intercept was -0.48 in period
1950/65 and becomes -0.42 (-0.48 + 0.06) in period 1965/2006.
From a purely statistical viewpoint, the estimated regression line fits the data quite well in
comparison to equation 2. In this equation also and are statistically significant at the 1
percent level and is not significant. The coefficient of intercept dummy is also not
statistically significant. This reveals that there is no difference in intercept or level of
agricultural output between two periods; 1950-65 and 1965-2006. The dw-statistic is equal
to 1.202. In this case also the computed dw-statistics lies below dL; cannot reject the
hypothesis that there is positive autocorrelation.
DOI: 10.7885/1946-651X.1007
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Table 24.1: Model (with intercept dummy) Summary

Model
Adjusted R
Std. error of the

estimate
2
0.987
0.04976
Predictors (Constant), LNL, LNM, LNK, Dependent Variable LNGVAO

Model
Sum of
Df
Mean Square
F
Squares
2 Regression
10.390
4
2.598
1049.00
Residual
0.124
50
.002
Total
10.514
54
Predictors (Constant), LNL, LNM, LNK, Dependent Variable LNGVAO
Sig.
0.000

Variables
Coeff.
Std. Err.
Cons.
-0.48
3.079
dummy
0.063
0.039
Nsa
0.38
0.316
Labr
0.98*
0.085
Cptl
0. 27*
0.086
t- Value
-0.16
1.58
1.21
11.44
3.13
Adj- R
.987
DW- Stat.
1.202
Results for the Cobb-Douglas Production function with both intercept and slop dummy
(equation 5) estimates are reported in Tables 25.1, 25.2, & 25.3. The estimated agricultural
production function with both intercept and slop dummy for Indian agriculture based on
data during the period 1950-51 to 2005-06, can be expressed in the following mathematical
form:
loge (GVAO) = -14.10 + 2.34 loge (L) - 0.26 loge (M) - 0.04 loge (K) +4.24 Dt - 1.09 [Dt
loge (L)] + 1.13 [Dt loge (M)] + 0.27 [Dt loge (K)] + t
From the above equation, we can be seen that in Indian agriculture during 1950/5-1964/65,
the output elasticities of land, labour, and capital were 2.34, - 0.26, and - 0.04, respectively,
and during 1965/66-2005/06, the output elasticities of land, labour, and capital were 1.25,
0.87, and 0.23. The sum of output elasticities (returns to scale) was 2.04 during 1950/511964/65 and increased to 2.35 during 1965/66-2005/06.
PAGE
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Table 25.1: Model (with intercept dummy) Summary

Model
Adjusted R
0.995
Std. error of the

estimate
0.02945

Model
2 Regression
Residual
Total
Sum of
Squares
10.474
0.041
10.514
Df
Mean Square
Sig.
7
47
54
1.496
.001
1725.34
0.000

Variables
Coeff.
Std. Err.
Cons.
-14.10
5.411
Dummy
4.20
5.881
Nsa
2.34*
0.623
Dnsa
-1.09
0.664
0.181
Labr
-0.26
Dlabr
1.13*
0.196
Cptl
-0.04
0.128
Dcptl
0.27**
0.143
t- Value
-2.61
0.71
3.75
-1.64
-1.42
5.80
-0.31
1.88
Adj- R
.987
DW- Stat.
1.202
From a purely statistical viewpoint, the estimated regression line fits the data quite well in
comparison to other two regression lines (3 and 4). Only the coefficient of land is
statistically significant at 1 percent level and the coefficient of labour and capital are not
statistically significant during the period 1950-51 to 1964-65. While in the period 1965-66
to 2005-06 the coefficient of labour and capital are statistically significant at 1 percent and
5 percent level, respectively and the coefficient of land is not statistically significant. This
shows that land significantly affected the agricultural output growth during 1950/511964/65 and after that land became less significant and now labour and capital are
significantly affecting the agricultural output growth. The dw-statistic is equal to 1.718.
From the Durbin-Watson tables, for 55 observation and seven explanatory variables, dL =
1.253 and dU = 1.909 at the 5 percent level. Since the computed dw-statistics lies between
dL and dU, autocorrelation is inconclusive.
DOI: 10.7885/1946-651X.1007
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28

Concluding Remarks
This paper evaluates performance and progress of Indian Agriculture since Independence.
In addition, this paper also analyzes sources of agricultural growth and determinants of
agricultural production. We use the decomposition test to analyze sources of agricultural
growth and the production function approach to analyze determinants of agricultural
production over the period 1950/51 through 2005/06. The study indicates that there is scope
to increase both net sown area and gross sown area. The study also highlights that only 39
percent of net sown area is irrigated area. After evaluating the changes in agrarian structure,
input use pattern and growth trend of agriculture, this paper point outs some points. These
are: agricultural workforce shifted from cultivators to agricultural labours, the number of
uneconomic holdings has an increasing trend, area under food crops shifted towards non
food crops, and within food crops area under cereals has been shifting towards non cereals,
growth trend of aggregate agriculture as well as all sub sector of agriculture except forestry
is showing declining trend during post-WTO period. It is also observed in this study that
production and yield instability declined for almost crop during post reform period while,
area instability increased in the same period. This further indicates that instability in area
became major responsible factor for production instability.
The decomposition analysis indicates that rising output per hectare is the predominant
source of agricultural growth for most of the crops and crop groups. Disaggregating of
reference period in four sub periods shows that expansion of agricultural land was the main
source of agricultural growth during the period before 1965/66 after that the contribution of
increased land area under agricultural production has declined over time and increase in
productivity became the main source of growth in agricultural production.
The estimation of aggregate agricultural production function with both intercept and slope
dummy indicates that land significantly affected the agricultural output growth during
1950/51-1964/65 and after that land became less significant and now labour and capital are
significantly affecting the agricultural output growth. Thus, the result of the aggregate
agricultural production function verifies the results of decomposition analysis.
PAGE
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29

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Agricultural Development in India Since Independence

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